Bulls double money in $PAGS

Longer-dated upside calls bought in PagSeguro Digital on Monday are already paying off for option traders.

On March 25, Investitute’s market scanners identified the purchase of 10,000 June $32.50 calls in one print for $1.35 with shares at $28.39. Open interest in the contract was only 307 before that session started, indicating that this was a new position.

Those calls traded for as much as $2.68 today, nearly double their purchase price. The stock rose 10.78% in the same time frame, a large move but nothing like that of its options on a relative basis.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

PAGS reached a new year-to-date high in the early minutes of today’s session before pulling back to close up 0.69% at $30.61. The mobile payment operator, based in Brazil, was upgraded to Overweight from Neutral at JPMorgan this morning which also raised its price target for the shares to $35 from $27.